Lithuania’s Planned Visaginas Nuclear Plant to Cost $6.5 Billion

Lithuania’s planned nuclear power plant will cost as much as $6.5 billion, making it the biggest investment in the Baltic country since independence from the Soviet Union 22 years ago.

Lithuania plans to control 34 percent of the plant, while Estonia, Latvia and Poland would each take a 20 percent stake, with the remaining 6 percent paid by companies leasing the atomic technology, Vytautas Nauduzas, a Lithuanian ambassador for energy and transport policy, said yesterday in an interview in London.

The Baltic region is seeking to cut its dependence on energy imports from Russia after closing the Soviet-era Ignalina facility at the end of 2009. Lithuania is planning to build the new 1,300-megawatt reactor in Visaginas by 2020 together with Latvia and Estonia and Hitachi Ltd. (6501), a strategic investor in the facility and Japan’s second-largest builder of nuclear reactors.

PGE (PGE) SA, Poland’s largest utility, dropped plans to invest in the new reactor to instead focus on other projects, the Warsaw-based company said Dec. 9.

The Polish government hasn’t pulled out officially and Japanese banks might make up the shortfall should Poland abandon the project, Nauduzas said today in a subsequent interview.

“Participation by Poland is a little confusing at the moment,” he said.

Japanese financial institutions have confirmed their interest to provide credit for the project, Arvydas Sekmokas, Lithuania’s Energy Minister, said today in a radio interview with Ziniu Radijas, the national broadcaster, without providing names.

Hitachi expects to sign the final contract to begin constructing the atomic plant this year, it said in December. The reactor will be built by Hitachi-GE Nuclear Energy Ltd., a joint venture with General Electric Co. Hitachi offered its advanced boiling water reactor technology with a proposed capacity of 1,300 megawatts.

Power production costs at Visaginas may average 7 centai ($0.03) to 10 centai per kilowatt hour, lower than current costs in the country, Sekmokas said on Feb. 15.